1979 (2) TMI 80 - HC - Income Tax

Summary

Issues:
Seizure of articles by income-tax authorities from police custody, legality of seizure, jurisdiction of income-tax authorities.

Analysis:
The petitioner, an income-tax and wealth-tax assessee, deposited cash, ornaments, jewellery, and watches with the Bursar of a school for safekeeping. The articles were later seized by the police on suspicion of being smuggled goods. The income-tax authorities also seized the articles from the police custody. The key issue was whether the seizure by the income-tax authorities was legal and within their jurisdiction.

The respondents argued that the police had seized the articles on behalf of the petitioner and contended that the income-tax authorities' seizure was lawful. However, the court found this argument to be without merit. It was established that the police had seized the articles under suspicion of being stolen or related to a suspected offense, in accordance with the Code of Criminal Procedure. The court referred to a previous case where it was held that if police seizure is under the Code of Criminal Procedure, the property must be dealt with as per the provisions of the statute, and income-tax authorities cannot seize the goods from police custody.

Based on the above analysis, the court quashed the seizure warrants issued by the income-tax authorities and directed them to return the articles to the police, who would then present the property before a court of competent jurisdiction for proper disposal. The income-tax authorities were given the option to apply to the court for obtaining the articles, subject to the court's decision. The petition was accepted, with no costs awarded.

In conclusion, the judgment clarified that the seizure of articles by income-tax authorities from police custody was deemed illegal in this case, as the police had seized the articles under the Code of Criminal Procedure. The court emphasized the importance of following legal procedures and jurisdiction when conducting seizures, ensuring that property is handled in accordance with the law.